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Parents and Providers Struggle with Child Care Costs

Dec 16, 2015Times ArgusJosh Ogorman

It’s a problem that lawmakers are struggling to answer and working parents — and their child care providers — struggle to live with every day: how to ensure access to affordable child care while generating a living wage for child care providers.

“It is the age-old dilemma,” said Sue Ryan, director of programs for the Vermont Child Care Industry and Careers Council. “Parents can’t afford to pay more, so how do child care providers pay their staff more?”

In Vermont the prevailing wage for a child care provider is about $11 an hour, which amounts to approximately $20,000 a year, well below the $24,000 poverty line for a family of four.

“It takes some creativity,” Ryan said of the financial challenges faced by child care providers. “The people who do this job do it because they love the job, and not the money.”

And while the wages are low, the expectations for staff are high. Many programs require child care providers to have a teaching degree or some form of higher education in the field of early child development, but these workers struggle to make crippling student loan payments with the prevailing wage being offered.

“We have providers who are also working night jobs to pay off their student loans,” said Barbara Rachelson, executive director of LUND, a Burlington-based nonprofit group that offers an array of family-based services, including child care.

LUND is among the 85 percent of child care providers in the state that accept child care subsidies available to parents through the Child Care Financial Assistance Program, offered through the Child Development Division of the Department for Children and Families.

The program helps eligible families pay for child care services for children from age 6 weeks up to age 13, or up to age 19 if the child has special needs.

The program is funded through a combination of state and federal money, with 56 percent coming from the state and 44 percent coming from the federal government.

Parents may choose any child care provider who accepts the payments, which go directly to the provider. The state pays for some of the cost, based on an established state rate.

The percentage of the subsidy that is available depends upon household income and the number of people in the household. For example, a family of four with a gross monthly household income of as much as $1,988 receives 100 percent of the subsidy.

A household earning more than that receives a smaller percentage. The same four-person household earning a gross monthly income of $3,160 will receive 50 percent of the subsidy.

The amounts of the subsidies vary depending upon the age of the child and the amount of care provided. The base rate subsidy for an infant in full-time care is $141 a week. For a toddler, that weekly subsidy is $137.

While the percentage of the subsidy available — and the subsidy itself — depend upon multiple factors, there is one unifying fact: the subsidies do not cover the full cost of child care.

According to a 2014 market rate study looking at child care costs in Vermont, the average weekly cost for full-time care for an infant is $217, a difference of $75 a week for a household that receives 100 percent of the available subsidy. For a toddler, the average weekly rate for full-time care is about $210, a difference of $72 for a family receiving 100 percent of the subsidy.

“The child care subsidies have not kept up with inflationary costs,” said Rachelson, whose nonprofit organization is able to raise funds so it doesn’t pass on the difference in cost to parents. “If we didn’t fund-raise for our program, there’s no way we could provide the services we provide.”

And for some parents, the gap might be even wider.

According to the 2014 market rate study, child care costs can vary dramatically depending upon where a family lives in the state. For example, in the Rutland area, the average weekly rate for full-time care for an infant is $198; in the Barre-Montpelier area, it’s $246. The subsidies do not vary based on where a family lives.

However, it would be incorrect to solely focus on the challenges of parents living in poverty. For families who earn too much to qualify for a subsidy, the cost of child care can be extremely onerous.

According to numbers from Let’s Grow Kids, a nonprofit group dedicated to championing the importance of early childhood development, a two-parent, two-child household earning $47,000 a year earns too much for a subsidy and can expect to spend 40 percent of their income on child care for their two children.

The same family, earning $83,000 a year, can expect to spend 26 percent of their income on care for two children.

Some parents will see some relief next year when the state rolls out 10 hours a week of early childhood education for children ages 3 through 5. However, the amount of time is not enough, and will not serve children younger than 3 years old, according to Robyn Freedner-Maguire, campaign director for Let’s Grow Kids.

“It’s a great step in the right direction to provide 10 hours of early childhood education, but it’s not enough,” she said.

In the meantime, the state has launched a commission to study the issue of child care affordability in Vermont, with a report expected in November 2016.